- AUTHOR: RISHAL BIPRAJ
- PUBLICATION DATE: JUN 9, 2023
The recent SCA case of South African Reserve Bank (“SARB”) v Maddocks NO dealt with the legal consequences of blocking orders made against companies which subsequently went into liquidation.
The Financial Intelligence Department of the SARB blocked the bank accounts of 2 companies, Sun Candle Products (Pty) Ltd and Xinming Mountain Textile (Pty) Ltd on the reasonable suspicion that the companies had contravened the Currency and Exchanges regulations (“Regulations”) by exporting large sums of monies from the country without the permission of the National Treasury, and that they had made advance payments for imported goods without submitting proof of importation of goods into the country to an authorised dealer. The blocking orders were issued during May and December of 2016.
Shortly thereafter a creditor applied for winding up of the companies which was lodged on 13 February 2017. The companies were finally wound up by the High Court on 10 March 2017. The concursus creditorum (“meeting” of the creditors, generally, to facilitate the equitable distribution of the estate”) of each company was established on 13 February 2017.
Subsequent to the issue of the blocking orders and after the liquidation of the companies, the SARB issued forfeiture orders in respect of monies standing to the credit of the banking accounts of each of the companies. On the dates that the forfeiture orders were published in the Government Gazette being 14 July 2017 and 31 August 2018, the monies specified in the forfeiture orders became forfeited to the State and were deposited into the National Revenue Fund in terms of Regulations 22 A-C.
